Bankruptcy Reclamation Rules

Macon Georgia Bankruptcy Lawyer | Bankruptcy Attorney Macon GA

Reclamation is the process by which a vendor or supplier can reclaim his good or products from the debtor who has filed for bankruptcy. There are certain rules with regard to reclamation that has to be followed by creditors during a bankruptcy proceeding. The US Bankruptcy Code contains the dictates of Reclamation Rules which are part of a normal bankruptcy case.

The finer aspects of Reclamation Rule in Bankruptcy Law involve:

• Time Frame – the vendor or supplier must make his claims to the bankruptcy court within 10 days of debtor filing for bankruptcy or within 20 days of goods or supplies being delivered. The period which is longer is applicable to make demands for either return of product which have been shipped to debtor or return of supplies provided to him.
• Demand Letter – the demand for return of products and supplies must be a written demand. This written demand should be either sent by email, fax or US mail or overnight delivery with a request for acknowledgement of the same to the debtor. A copy of the same should be filed with bankruptcy court clerk so as to document the demand in court.
• Delivery – in order to reclaim products and supplies via reclamation rules in a bankruptcy case, the good and supplies must have been delivered to the debtor.
• Insolvency – the debtor must have been insolvent when supplies and good reached him prior to his filing for bankruptcy. The financial status of debtor can be unknown at the time by vendors and suppliers.
• Ordinary course of Business – the reclamation is possible only for those deals which are part of normal business deals taking place. Any special deal or unique situation is not eligible for reclamation.
• Possession – at the time that reclamation demand is made, debtor must be in possession of products and supplies being reclaimed by vendor and suppliers.
• Deadline extension – the provisions in the reclamation rules have no room for extension of deadlines for submission of reclamation demand letter.

The first and foremost step to betaken if you are a supplier or vendor to a business which has recently filed for bankruptcy is to consult a bankruptcy attorney. He would be in a position to brief you with regard to your options of reclamation or be named as a creditor and submit a proof of claim. Rules are followed very strictly in a legal procedure and it is in good interests to proceed carefully and under guidance of a bankruptcy attorney in order to ensure that either your goods are returned or you are paid for them.

Contact a Macon bankruptcy attorney if you need debt relief assistance or want to file bankruptcy.